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Forint Slide Accelerates As Hungarian Default Risk Now 14 Wider To 277bps
Poor, poor Europe. Every room one shines a light in, the cockroaches don't even bother to scurry to safety any more. Yet what is glaringly obvious takes a media-reported soundbite to awake people. So is the case with Hungary today. After opening 7 tighter, Hungarian CDS are now 14 bps wider to 277bps. As the attached chart shows, the Hungarian Forint is now in freefall. Yet if investors are concerned about Hungary, they should take a look at some of its less lucky Eastern European neighbors which, just like Hungary, have been considered to be strong for so long.
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EUR-USD 1.2199
Awaiting the third ramp job of the day..... Wait for it...
1.2188 looking like s-t low for now
Here comes the 1.2150 retest. I really think they'll support this level at ANY cost currently. Only time will tell tho...
Come one Gentle Ben. 1.2153!!!!! Are you sure your keyboard is even plugged in?
Jiggle the cord!!!
this really is funny. What did "Big Helmet" say in the movie Space Balls? "Did you see me playing with my toys?" And the response? "No, sir, I did not see you playing with your toys." And evil Big Helmet responded, "Goooooooddddddd."
Hum...I am long EUR/HUF, no idea why ANYONE is playing EUR/USD...????
Watching this and reading between the lines it seems the IMF- bailout/deflation medicine is backfiring in Hungary, the poster child for austerity in Eastern Europe:
http://www.businessweek.com/news/2010-05-29/hungary-s-orban-assumes-powe...
So- called 'Growth' in Hungary is hoped to be .5% this year, far insufficient to outpace debt service costs. Rather, IMF enforced austerity pulls debt service farther out of reach.
Ironically, the rate regimes in various nations were intended to INVITE a carry trade to bring credit into their economies.
They welcomed being the new South Seas.
This will be their undoing now as the fictitious capital all sloshes back out.
Looks like Hungary’s Government Debt Management Agency had to cut their bond auction.
http://www.portfolio.hu/img/upload/2010/06/100603Auction01.jpg
Cant be good for Unicredit and or Austria
Is 14bps really that much of a difference?
as Dburger says below Yes. lol, just try making a budget or being rational about debt service, or for that matter attracting buyers to your debt service with that level of increased cost, volatility, and therefore uncertainty and lack of ...wait for it... Confidence.
Aka Ka-BOOM!
Its a 5% move in one day. Yes it is.
Let's all welcome the new grouping of similarly positioned countries -- the PHIIGS.
Eat your heart out Jim O'Neill.
You forgot Austria.
In other news CNBC says to "buy eastern euro debt".
...and private mortgage backed securities.
They've got fantastic cash flow.......
I swear to God some guy just said that as I was walking past the TV.
UP UP AND AWAY!!!
TO INFINITY AND BEYOND!
Soros home plate.
P.S.F.:
http://williambanzai7.blogspot.com/2010/06/piigs-szalami-and-forints.html
It's actually pretty funny. It was the S Koreans who coined the phrase "I Am Phucked" as the real acronym for IMF. Needless to say the Euro-phags were pounding the table back in 98 to "throw Asia under the bus" and they used "their" IMF to do it. Weeellllll isn't turnabout a real phukin' good time! I know--maybe the world could ask of all those Nancy's over there for some real population growth! Never have a people been so afraid of the word "family" since probably Ghengis Khan.
Is the IMF the US or Europe? because when the IMF is bailing out the world, that is the US. When the US screws the world, that is Europe.
Gold $1300 here we come....
yeah, um...gold just fell off a $20 cliff.
if you're day trading, bummer. longer term however, dollar likely to peak soon and then attention to turn to U.S. and watch the dollar begin/continue it's death walk. i'll take the two steps forward, one step back price action.
Debt, as we know it, or "money," take your pick, is retreating from the reaches of the earth to its source.
It's flooding out of developing economies and repatriating to the carry sources, Japan and the US.
Oil at these price levels (reflecting decline in supply) is slowly strangling the last vestiges of marginally economical activity in the BFE countries of the world.
The low-hanging fruit is all gone.
Squeeze the turnip is next...